In a report published earlier this month from Stephens, Inc., a privately held financial services firm, it explored the reasons and factors that influence demand for payday loans. We thought some of these reasons would be interesting to you as a consumer and as an overall participant in the economy.

During times of recession, you might think that demand goes up for payday loans, since more consumers are unlikely to meet monthly bills and expenses. That is actually quite the opposite. The report analyzed the recession of 2001, as well as the current recession and found that loan demand decreased due to high unemployment, low consumer confidence and higher consumer savings.

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Payday loans have been around for a long time but they seem to have become more popular over recent years. With many people struggling to get finance in the post-credit crunch years, more and more people have become aware of the existence of payday loans, not least because many payday lenders are taking advantage of the difficult financial climate and advertising their services more to what has become a desperate audience.

For many people in the current climate it has become impossible to stretch the income far enough, and a huge number of people are left facing a shortfall in their finances when it comes to meeting all of their financial commitments. For this reason more and more people end up turning to payday loans, which are short term loans that are designed to tide the borrower over until payday comes along.

However, the interest charges on these short term loans can be phenomenal and many people have ended up paying a fortune because they have let the loan rollover into the next month, which results in the fees being applied again.

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Q: There seem to be more lenders like US Bank and Well’s Fargo, that are now offering private student loans with a fixed interest rate. What would be the major differences between private student loans with a fixed interest rate and federal student loans (which also have the fixed interest rate), if any?

A: Lenders such as US Bank and Well’s Fargo have started to offer private student loans with a fixed interest rate; however, there are still large differences between federal student loans and private student loans (with or without a fixed interest rate).

First, the fixed interest rate private student loans that are offered by most private lenders still carry a higher fixed interest rate than most federal student loans. Second, while most federal student loans are based on a borrowers financial need, private student loans (regardless of fixed or variable interest rate) are based on a borrowers credit. If

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Q: After I have received federal student loans, how much money will I be allowed to take out in private student loans? If a student did not receive much from federal student loans and FAFSA, does this mean that a student will not receive much money from private student loans as well?

A: Federal student loans and private student loans, although both education-based loans, have many differences. Federal student loans are the largest source of college education loans, and should always be considered first (after scholarships and grants have been exhausted), before applying for private student loans. Federal student loans typically offer the best interest rates, terms, and repayment options when compared to most private student loans.

Federal student loans are based on a borrowers financial need, where as private student loans are based on a borrowers credit score/history.

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